SEOUL– The following is a chronology of major events leading to a verdict from the International Centre for Settlement of Investment Disputes (ICSID) that orders South Korea to pay US$216.5 million to U.S. private equity firm Lone Star Funds in a decadelong legal battle surrounding the firm’s sell-off of a controlling stake in the now-defunct Korea Exchange Bank (KEB).
Aug. 27, 2003 — Lone Star Funds officially acquires 51 percent of KEB for 1.38 trillion won (about $1.4 billion at the exchange rate at that time).
Oct. 14, 2004 — Spec Watch Korea, a civic group, petitions the Seoul Administrative Court to determine if Seoul’s approval of Lone Star’s acquisition of KEB was legal.
Sept. 14, 2005 — Spec Watch Korea files a lawsuit against the head of Lone Star and 19 South Korean officials and others, alleging documents were forged to facilitate the U.S. company’s takeover of KEB.
Jan. 12, 2006 — Lone Star announces plan to sell off KEB.
March 22, 2006 — Kookmin Bank is selected over Hana Financial Group Inc. of South Korea and Singapore’s DBS Group Holdings Ltd. as the preferred buyer of KEB.
May 9, 2006 — Prosecutors arrest Yoo Hoe-won, head of Lone Star Advisors Korea, on suspicion of embezzlement and breach of trust.
June 14, 2006 — Byeon Yang-ho, a former head of the finance ministry’s financial policy bureau, is arrested on suspicion of colluding to understate KEB’s financial value.
Nov. 23, 2006 — Lone Star pulls out of a US$7.4 billion contract to sell a controlling stake in KEB to Kookmin Bank.
Dec. 7, 2006 — Prosecutors say there were illegalities in Seoul’s approval of Lone Star’s qualifications to buy KEB at a below-market price.
Sept. 3, 2007 — HSBC Holdings Plc announces an agreement with Lone Star to buy a 51 percent stake in KEB for US$6.31 billion.
Sept. 19, 2008 — HSBC Holdings Plc decides to terminate the KEB deal, citing falling asset values amid global financial market turmoil.
Nov. 24, 2008 — The Seoul Central District Court rules that the 2003 sale of KEB to Lone Star was an “unavoidable” decision amid the bank’s financial ill-health, clearing Byeon Yang-ho and other officials of breach of trust charges.
March 10, 2010 — Lone Star announces plan to resume sale of its KEB stake.
Nov. 25, 2010 — Hana Financial Group signs a contract with Lone Star to buy its KEB stake for 3.9 trillion won.
Nov. 21, 2012 — Lone Star files investor state dispute arbitration claims against the South Korean government for losses related to its KEB investment, demanding about $4.68 billion in compensation.
May 15-22, 2015 — The ICSID holds its first hearing on the Lone Star case.
June 28, 2022 — The ICSID declares an end to all proceedings in the Lone Star case.
Aug. 31, 2022 — The ICSID orders the South Korean government to pay US$216.5 million to Lone Star.
Source: Yonhap News Agency